Matthew Barnes, chief executive, United Kingdom and Ireland at Aldi, said: "We're over the moon to be named the best supermarket in the Which? annual customer satisfaction survey voted for by United Kingdom shoppers".
Aldi came out top despite its stores being described as "untidy" and "a jumble sale".
Knocking Waitrose from the top spot, Aldi scored highly in the survey for value for money and the quality of its fresh and own-label food.
The budget supermarket retailer has replaced Waitrose at the top, a position it held for three years.
"To do it in a way that is complementary to the core business so that people don't ask the question "this is exactly the same product, why can't it be cheaper at the Tesco store" is a big issue", he said.
Meanwhile, one customer told the consumer group they did not do their main shop at Waitrose because it was "a bit pricey".
This category was based on the convenience of delivery slots, the choice of substitute items and the service of the drivers.
The news comes as Tesco continues to feel pressure from Aldi and Lidl, with the latest Kantar data showing earlier this month that the blue-chip's grocer market share had continued to decline in the 12 weeks to January 28, having dipped 0.3 percentage points to 27.8 percent.
"We look forward to welcoming many more new customers to enjoy the Iceland experience, both in-store and online, in the year ahead".
In fact, all of the "Big Four" supermarkets languish at the bottom of the 2018 table, with Sainsbury's found most wanting.
Alex Neill, managing director of Which?, said: "With food costs rising it seems as though shoppers have felt the pinch and are voting with their feet and wallets".
In the most recent quarter, Lidl and Aldi posted sales growth of 16.5% and 16.2%, respectively, gaining a combined market share of 11.9%. Tesco was ranked sixth and Asda and Morrisons were jointly ranked seventh, with Sainsbury's coming bottom.